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The Tail of the Lazy Mortgage

24th May 2019

(or in our world, “grandfathering”).
How long have you had your home loan? 3 years? 5 years? Have you been caught by the ‘lazy mortgage’ trap?
Let’s explain what this means. Think back to when you got your home loan, all the research that you did to get the best deal. Remember you picked the best deal and it was a ‘special offer’, great rate, great fees? Now we’ll tell you about a little game that banks play. This ‘deal’ while great on the day has now been replaced by their next great deal.  Your loan? Well that product is no longer sold by the lender and has been ‘grandfathered’ (the product is put aside and no longer sold). Over time the lender sneaks your rate up little bit by little bit so over time your deal is not so good anymore.
This trap can be sprung another way. Say you fixed the rate on your loan for 3 or 5 years. At the end of the term the loan automatically changes to another product at the end of the fixed period. When you do your loan you check and find that the loan will go to one of the lenders good products. Due diligence done? Well, maybe not; over the course of your fixed rate period that ‘good product’ gets grandfathered and the deal may no longer stack up.
What they are relying on is you being too lazy to check that you still have the best loan, and they use this to make more money out of you. Hence the ‘lazy mortgage’.  
But you can beat the banks at their own game. At least every 2 years go see a mortgage professional (us!) to get a quick mortgage health check, it only takes a few minutes and can save you thousands of dollars.  If a good mortgage professional can’t save you money they will tell you exactly that, if they can its then your decision if you want to make the change. There is no charge for the health check, and there is no charge to you if a change is made. So how can you lose?
“Sally has had a home loan for three years. Sally has never checked to see if her loan is still the best that she is eligible for. Silly Sally!” Don’t be like Sally..."

Contact Us to arrange a complimentary home loan health check today.